Greg Simon, executive director, White House Cancer Taskforce
The wildcard that is President-elect Donald Trump caused chaos in the healthcare public markets on Wednesday after declaring that pharma companies are “getting away with murder” in the high prices they charge for drugs and their outsourced manufacturing practices. Trump indicated that he will aggressively pursue a policy to reduce drug prices and allow Medicare to engage in bidding.
The overall stock market sank before recovering. That was not the fate of pharma company stocks, however.
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Later, on Wednesday, former Pfizer executive, cancer survivor and executive director, White House Cancer Task Force, was asked to reflect on Trump’s stance.
“Well, first as a cancer survivor who used drugs made by pharma companies, I don’t think the pharma industry is getting away with murder.” said Greg Simon. “I think the pharma industry is saving lives.”
Simon was also dismayed by the beating the pharma company’s stock took. After Trump spoke at a news conference, the Nasdaq Biotechnology Index fell 3 percent while the Standard & Poor’s 500 Pharmaceuticals, Biotechnology & Life Sciences Index declined 1.7 percent. These constitute the largest one-day swoon for the indexes since October, according to Bloomberg.
“I am hoping that the industry will stop responding to irrational comments by dropping the market 5 percent because it doesn’t hurt the company,” he said. “It hurts their investors. Who are their investors? Pension funds and a lot of individuals. So we need a more rational approach and understanding that no president is king.”
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Simon went on to say that presidents may talk but there are laws in place and people “can’t just go in and just change everything without Congress giving you the tools to do that.”
He also took special aim at the solution that Trump seems to have landed upon to stem drug price increases. Here’s what Trump said, according to a transcript of his prepared remarks:
Pharma, pharma has a lot of lobbies and a lot of lobbyists and a lot of power and there’s very little bidding on drugs. We’re the largest buyer of drugs in the world and yet we don’t bid properly and we’re going to start bidding and we’re going to save billions of dollars over a period of time.
But Simon, who was a senior executive at Pfizer found this approach unrealistic.
“The idea that you can just negotiate your way down to lower prices…CBO [the nonpartisan Congressional Budget Office] has said for years that giving Medicare the power to negotiate drug prices would do very little to lower the cost …,” Simon declared.
In the meantime, the best course forward would be to not react to his comments, however unpredictable.
